Transcript What You Wanted to Know About Formularies

What You Wanted
to Know About
Formularies
Emmanuelle Mirsakov
Pharm.D. Candidate 2007
USC School Of Pharmacy
Purpose of a Formulary
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To manage costs and improve quality of
care
Goal of Formulary review process:
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To provide a quality pharmaceutical benefit,
determined through an evidence based decisionmaking process, taking into account the reality of
constrained health care budgets.
Who is Behind the Formulary
Process?
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P+T Committee (Pharmaceutical and
Therapeutics Committee)
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Physicians
Pharmacists
Nurses
Economists
And more…
Types of Formularies
Type
Structure
Positive
Negative
Open
Covers any
prescription
Flexibility/Freedom of
choice
Liked by patients/Dr’s
Large amount of choices,
no direction by P+T
committee
Expensive
Will not cover nonformulary drugs
Minimizes Costs
Direction in choices made
by P+T committee
No Flexibility
Patients Pay more out of
pocket
Use of formulary or
preferred drugs for
a reduced co-pay
(e.g. 3-tier co-pay)
Flexible
Patient pays less out of
pocket for nonformulary drugs
Minimizes costs
P+T committee direction
*Self
Funded
plan
Closed
*Strict
HMO;
Hospital
Preferred
*Self
Funded
plan
Example of Preferred Tiered Copay
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Tier 1 copay: $10 (generics)
Tier 2 copay: $25 (branded, formulary)
Tier 3 copay: $40-$100 (covered,
nonformulary, branded or generic)
Tier 4 copay: 100% of price (not covered
medications)
Pros and Cons of a Preferred List
Pro
 Flexible
 More access to medications than
closed structure
 Cost saving for plans and
members
 Helps educate members about
drug costs
Con
 Not an all inclusive list
 Higher member out of pocket
costs/ ↓ drug therapy compliance
 More effective+ more costly drugs
might not be chosen in lieu of
cheaper drugs
Decisions of a Formulary List
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1. Clinical:
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Based on strength of scientific evidence and
standards of practice
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Clinical trials
Published practice guidelines
Comparing efficacy
Equivalent drugs: dose, clearance, dose
adjustments…
Usually 2-3 drugs per therapeutic class
Decisions of a Formulary List
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2. Economic:
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Equivalency Assumption = cost
Drug therapy impact on health costs
Incentives/ rebates
Generics
Decisions of a Formulary List
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3. Other:
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Demographics of patient population
Bias of the organization (Christian Foundation,
Jewish organization…)
Cost Saving Techniques
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Prior Authorization
Quantity Limitation
Mail Order
Step therapy
Generics
Prior Authorizations
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Restricts Coverage of certain drugs based
on the patient’s conditions
Usually need to try an alternative first
Usually for drugs in the range of $250$2,000/month
Quantity Limits
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Pre-defined maximal quantities (restrict
dosage units for an X amt of days)
Established to decrease abuse and
overuse
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Improve compliance
Lower costs
Mail Order
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Automation and high volume purchasing, allows
filling of prescriptions at a lower fee structure than
a retail facility
Other benefits of mail service include provision of
patient education materials on the products
dispensed, "24/7" pharmacist consultation
availability, success in moving patients to more
cost-efficient treatment choices, successful
compliance programs
Don’t be fooled, they have to make up the
difference somewhere
Step Therapy
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Step therapy: The practice of beginning
drug therapy for a medical condition with
the most cost-effective and safest drug
therapy and progressing to other more
costly or risky therapy, only if necessary.
The aims are to control costs and minimize
risks.
Commonly Excluded Drugs
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Prenatal vitamins
Fertility agents
Sexual Dysfunction Agents
Oral Contraceptives
Cosmetic Drugs
OTC
Experimental/ Off-label Use
Checks and Balances
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Quality Control
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Accreditation programs (Joint Commission on
Accreditation of Health care organizations;
National Committee for Quality Assurance)
Outcomes
Cost/ Are the savings real?
Fidelis
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Preferred Drug list
NY Medicaid Formulary
Quantity Limits
Covers all generics/ Generic bias
Step-Therapy
Prior Authorization
Includes classes for major disease states
Excludes erectile dysfunction and OC (Fideles is
a Catholic organization); Includes pre-natal
vitamins and OTC
Fidelis A Medicaid HMO
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2 Components:
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Managed care coverage for low income who do
not qualify for Medicaid
NY State Medicaid
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Benefits must be at the level of the state fee-forservice programs
Contracting out to managed care entities relieves
gov’t
Medicaid Coverage
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Free services and medications
Covers non prescription medications and
products
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Prosthetics
Durable medical equipment
Diapers
Pre-natal and children’s vitamins
Thanks!
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Thank you for listening
Okay… I am ready for your questions